Boxlight Corporation Q3 FY2023 earnings call

• Boxlight is evaluating geographic expansion in the Asia-Pacific region, particularly in Indonesia, Singapore, Taiwan, Thailand, the Philippines, and Vietnam, meeting with distribution and reseller partners at an education conference.
• Introduced Google EDLA interactive panels, Clevertouch IMPACT Lux and MimioPro G, and new Clevertouch commercial displays powered by CleverLive.
• Won nine Best of Back to School awards and CleverLive was named Digital Signage Technology of the Year. Published success stories of teachers using their products.
• Had major rollouts in the U.S. and U.K., including shipments to El Paso School District, Las Cruces, Michigan, Dayton, Ohio, and Welsh schools. In Germany, shipped screens under tenders.

For the third quarter, Boxlight reported $50 million in revenue, $18 million in gross profit, and $4.9 million in adjusted EBITDA. Revenue declined by 28% for the quarter and by 23% for the nine-months ended September 30th over the same periods last year. Gross profit margin was 36% for the quarter and 37% for the nine months ended September 30th, an improvement over the prior year periods. Revenue decline was due to softer industry demand and not cashing market shares as anticipated in key geographic markets and product categories.

• For the fourth quarter, expects revenue and adjusted EBITDA to be in line with Q4 last year.
• For full-year 2024, anticipates modest revenue growth driven by investments in enterprise vertical, certain geographic regions, and expanded product suite.
• Plans to refinance debt with a lower cost facility for more favorable loan covenants and interest expense savings.

• At September 30, 2023, was not in compliance with the senior leverage ratio under its credit agreement, but cured by paying $4 million principle in November. Actively seeking to refinance debt.

Q: Can you help reconcile stronger orders in July-August with lower than expected revenue?

A: It was soft demand across the board in U.S. and EMEA during Q3, with second half of Q3 being slower than expected.

Q: What are customers saying about market dynamic?

A: Customers are not as urgent to place large orders, likely due to not being as urgent as post-pandemic, with big projects pushed into New Year.

Q: Talk about expansion opportunity plans in Asia?

A: Biggest growth opportunities are in U.S. and Western Europe (especially Germany), with some opportunities in APAC but substantial growth expected in existing territories over next 12 months Q: Nuanced trends in orders slowdown between corporate enterprise and K-12 education?

A: Enterprise is less than 10% of total business, slowdown was purely in K-12 education vertical